A £1m Boris Johnson-backed startup competition designed to entice promising tech businesses to London was quietly killed off in 2013 and will not run again, the Guardian has learned, while the Digital Shoreditch 2014 festival has been cancelled.

The Million Pound Startup competition, supported by the Mayor of London and the Tech City Investment Organisation (TCIO), among many others, was closed last year without any public notice because none of the 1,000 entrants were deemed worthy of the prize.

Described as “a new, groundbreaking global competition to bring a high-growth technology company to London”, it offered entrants the chance to win £1m, as long as they moved their HQ to the capital. Winners were also to be offered legal consultation worth £10,000 from Taylor Wessing and £10,000 of consulting services from KPMG.

Although a final 20 had been selected from more than 1,000 applications from 72 countries, in late September it became apparent there were no suitable candidates.

In October, all the money invested in the project was returned. “The £433,000 capital raised had been held in ESCROW by Seedrs as part of their normal platform and was returned to the 200 or so investors,” said Richard Botley, an account director from Ketchum, the PR agency which had pledged to give the winning company public relations services worth £20,000.

“The requirements for the finalists and eventual winner included both ambitions - could you be a £100m company and are you at the right stage for £1m investment? In the end it proved difficult to find companies that had both the right level of ambition and could stand a valuation for £2m-£10m.”

Despite some “amazing companies” being uncovered, and even with all the help the winner would have received, no entrants were deemed of good enough quality, a spokesperson from Seedrs said.

Steve Price, a volunteer for Digital Shoreditch who helped run the competition, said there were too many early-stage companies who entered. “To get £1m off an investor, you need to be a little bit further down the road.”

No further Million Pound Startup competitions are planned for the future. Neither Ketchum nor Price could say why no public release had been made available when it was shut down.

The Guardian also understands the Digital Shoreditch 2014 festival is to be cancelled, partly due to a lack of resources. A decision, announced today, will “suspend new activities” related to the event.

The festival, designed to showcase the best of Tech City’s startups and create a vibrant networking environment, was set up in 2011, with the following two years seeing growth in numbers, according to Digital Shoreditch. An estimated 15,000 attended last year, according to the not-for-profit.

“We have the need for what we create to be as good or better than the last time. And well after three years of Digital Shoreditch, it seems that it’s time for us to focus our attention on to bringing new perspectives into the mix,” a notice on the Digital Shoreditch website read.

“To refresh. To ensure we’re super relevant. We want to create completely new types of events and competitions. And most importantly we want the next Digital Shoreditch Festival, whether it’s in 2015 or 2016 to be even better and bigger than 2013.”

Despite the government’s efforts to foster a thriving tech sector in the capital around the Shoreditch area, it continues to face criticism over its work on Tech City.

This month, the author Cory Doctorow wrote in The Guardian that companies in Silicon Roundabout were being forced out of the area because of government-approved construction projects and rising rents.

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